Where To Invest Now – Market Strategies Newsletter April 23, 2012

Market Strategies

Covering High Return Balanced Investing Success Strategies For

Stocks ■ Bonds ■ Interest Rates ■ Natural Resources ■ Currencies ■ Venture Capital ■ Gold

 

A Publication of Princeton Research, Inc. (www.PrincetonResearch.com)

Contributing Staff: Michael King, Bill Chippas, Charles Moskowitz

 

 

 April 23, 2012, Market Strategies

Where To Invest Now Newsletter

 

To subscribe to the Options Only Acct Trades simply TEXT the word UPDATES to 69302

and you will automatically be included.

 

To Read This Market Strategies Newsletter In Adobe PDF Version – CLICK HERE – http://www.princetonresearch.com/4-23-2012-Market-Strategies.pdf

 

 

$10,000 OPTIONS ONLY ACCOUNT

New Trades for this week

The $10,000 Options Only account had a Loss last week of $215 decreasing our gains for the year from $2,103 to $1,888.  

 

Three positions remain:

The FAZ May 22 Calls,

CSCO May 20 Calls and

IBM May 205 Calls.  

The Open positions are highlighted in the options table below. 

Approximately $2210 funds are in use.  

This was a week with many cross-currents.  We had more EU news to depress the markets and terrific Q1 earnings for several of the markets leaders.  MSFT was a standout for not only current earnings but also in the forward outlook arena.  Moves in this stock haven’t been this good in decades. IBM was a mixed bag as were some of the numbers in the financial sector and AAPL comes in a few days. Many stocks have had “meaningful” corrections and may be approaching support. 

 

The problem for me is that there may be more room to the downside (in a normal and expectable pullback) and we have a potentially troublesome “unresolved” technical formation called a Bear Flag.  If resolved to its potential downside objective we could see the Dow and S & P 500 at the 12,300 and 1300 levels respectively. This makes taking on new trades very difficult.  While keeping my eye on PPO, TLT, and KRO for upside action, and DXD, IPGP, FDX, and LULU for possible…repeat possible…downside action, we will maintain our long positions in IBM and CSCO as well as our balance using the RWM and FAZ (reverse financial group) for protection. 

Look for updates via our free texting service as they may be important buy or sell signals….CAM

 

Remember, these trades are based on your participation in the

TEXT MESSAGE TRADE ALERTS SERVICE

TO RECEIVE ALL UPDATES.

TEXT the word UPDATES to 69302

To Get In Now

 

Previous closed out trades not listed here may be seen in the March, February and January weekly newsletters. See past issues at http://www.princetonresearch.com/market-strategies-newsletter/

DATE

TRADE

PRICE

COST

PROCEEDS

RESULTS

4/19

Bought 8 FAZ May 22 Calls

1.50

1200

 

 

4/19

Bought 5 CSCO May 20 Calls

.82

410

 

 

4/19

Bought 4 IBM May 205 Calls

1.50

600

 

 

4/18

Sold 5 SBUX May 57.50 Puts

1.28

 

640

110 Loss

4/18

Sold 2 AMZN May 195 Calls

7.65

 

1520

210 Gain

4/18

Bought 5 SBUX May 57.50 Puts

1.50

750

 

 

4/16

Sold 3 IBM May 200 Puts

3.45

 

1035

15 Loss

4/16

Sold 15 S April 2.5 Calls

.19

 

285

300 Loss

4/13

Bought 2 AMZN May 195 Calls

6.60

1320

 

 

4/13

Bought 3 IBM May 200 Puts

3.50

1050

 

 

3/16

Bought 15 S April 2.5 Calls

.39

585

 

 

New trades $ 10,000 account…In Texting we have a limited amount of words. In the interest of brevity: OPTIONS ONLY: 5 May, 6 June . The Quantity and Strike Price for each trade is specific.

For any questions please call 702 650 3000

 

Market Laboratory –Weekly Changes

Prices are copied from Barron’s Weekly and Yahoo Finance and may be incorrect

Dow

13029.26

  +179.67

+1.40%

Nasdaq

3000.45

-10.88

-0.36%

S&P 500

1378.53

+8.27

+0.60%

Transportation

5234.25

+37.21

+0.72%

Russell 2000

804.05

+7.76

+0.97%

Nasdaq 100

2676.04

-22.95

-0.85%

Gold

1642.80

 -17.40

-1.05%

Silver

3165.1

+26.1

   +0.83%

Crude

103.88

  +0.56

+0.54%

Heating Oil

314.08

-3.81

-1.2%

Unleaded Gas

3.1100

-.1567

-4.8%

Natural Gas

1.927
-0.054             
-2.73%

VIX

17.44

-2.11

-10.79%

Put/Call Ratios

S&P 100

159/100’s

+32/100’s

   Put/Call Ratios    CBOE Equity

          63/100’s

           -3/100’s

 

Bonds

141-31 +0-17

3.13% -0.02%

10 Yr Note

131-214+0-44                                                1.97% -0.03%

Copper

369.80

+7.10

+1.96%

CRB Inflation

Index

301.20

-1.65

-0.54%

Barron’s Confidence

68.3.%

-0.7%

S&P100

626.10

+3.46

+0.56%

5 Yr Note

123-167 +0-015                                                   0.85% -0.01%

 

Dollar

79.31

         -0.74

-0.92%

DJ Utilities

460.75

+8.65

+1.91%

AAII

Confidence

Index

Bullish

31.21

+3.1%

Bearish

33.8%

-7.8%

Neutral

35.0%

+4.7 %

 

M1 Money  Supply

+18.9%April9th

 

M-2 Money

Supply

+10.1%April9th

 

M1…all money in hands of the public, Time Deposits Traveler’s Checks, Demand Deposits

M2 adds Savings and Money market Accounts both compared with the previous year.

 

 

New Stock Recommendations

Last week we Bought RWM and with Text Alerts we bought AAPL, FAZ and SIRI. 

 Each stock is allocated a theoretical $ 5,000 share of the portfolio unless otherwise indicated.

Stock

Purchase Price

Purchase Date

Stop/Loss

 

Price/Date Sold

 

Profit/(Loss)

AAPL 5

578

4/20/12

 

 

 

FAZ 250

22.07

4/19/12

 

 

 

SIRI 2000

2.265

4/18/12

 

 

 

RWM 200

26.95

4/16/12

 

 

 

AMZN  25

187.01

4/13/12

 

 

 

AAPL 10

612.01

4/13/12

 

 

 

TXGE*20830

.24

4/9/12

 

 

 

EXM 1200

1.90

4/3/12

1.60sco

 

 

CWTR 2500

1.16

4/2/12

 

 

 

IYT 60

92.48

3/29/12

 

 

 

AIVN* 10000
          * 5000

.25
.225

3/12/12
3/12/12

.10 sco
.10 sco

 

 

SNTS 1000

4.80

3/12/12

5.47 sco

 

 

XBOR* 2000

2.25

2/24/12

 

 

 

CISG 600

8.50

2/10/12

 

 

 

XBOR*3570

1.40

8/12/11

0.70 sco

 

 

LEI* 2425

2.06

8/10/11

1.03x

 

 

LEOM*16650

0.30

12/17/10

0.03 sco

 

 

Note: Previous closed out stock and option positions can be found in the April 16 and newsletters dating back to July 20, 2009.  Stay alert on the free texting service for new trades and exits.

 

Model Portfolio Comments/Changes:         

 

                                     INDEX OPTION RECOMMENDATIONS

 

For those of you who do not buy puts to protect your portfolio, there are many ETF’s that are the inverse of the DOW. The symbols are DOG, SDS and RWM, whichgo up when the DOW, S&P 500 and Russell 2000 go down and down when they go up. The DZZ goes up double when gold goes down.

 

 

 

New Stock Option Recommendations

Option and Overall Comments

 

We had a Loss last week of $430 in an Up week.

Our gain for the year was $7,930 and with last week’s Loss has decreased to $7,500.

We have Three long options positions remaining, the CSCO Jan 20 Calls, CSCO May 20 Calls, IBM May 205 Calls. The Stock table includes Sixteen long stock positions: FAZ, RWM, SIRI, AMZN, AAPL, TXGE, EXM, CWTR, IYT, AIVN, SNTS, CISG, LEI, LEOM and XBOR (a double). FAZ and RWM are inverse ETF’s.

 

The options call for a $ 2,500 investment unless otherwise started, while each stock position requires $ 5,000 unless specifically stated.

We are basing money management on a hypothetical $ 100,000.00 and are using $2260 in the
options positions and $ 77,970 in the 16 long stock positions for a total of $ 80,230 with $ 19,770 in cash. These figures are approximate. We do not count commission costs and there may be errors.

 

Executions that have occurred at or near the open or close of trading sometimes vary from our actual numbers.  For example, when something opens down and it is through our price, we take the next trade whether it is an uptick or continues lower.  This sometimes results in a 50% trade that is slightly above or below the exact number…

 

Previous Week’s Recommendations and Rules for the $ 100,000 account

 

  • Text UPDATES to 69302.
  • All options count for about $ 2,500.00 for model portfolio calculations unless otherwise stated.
  • When the option has doubled sell half the position.
  • Stop Loss protection is either half or offered with each trade.
  • The cost of the option is the asking price (or the price between the bid and ask, whichever is more realistic)
  • The options will be followed until closed out.
  • Option Symbols are stock symbol with expiration month and strike price
  • Subscribers can follow us on Twitter or call  702 650 3000 for up to date information.

 

 

Option

          COST

Date

Sold

 

Date

Profit/(Loss)

IBM May 205
8 Lots
Calls             1.50

4/19/12

 

 

 

 

CSCO May 20
10 Lots
Calls               .82

4/19/12

 

 

 

 

SBUX May 57.5 10 Lots Puts              1.50

4/18/12

1.28

 

4/18/12

(220)

AMZN May 195  4 Lots Calls             6.60

4/13/12

7.65

 

4/18/12

420

IBM May 200
6 Lots
Puts              3.50

4/13/12

3.45

 

4/16/12

(30)

S April 2.5
30 Lots
Calls               .39

3/16/12

.19

 

4/16/12

(600)

CSCO Jan 20   3 lots Calls               .80

2/14/11

     

 

Note: Previous closed out stock and option positions can be found in the April 16 and newsletters dating back to July 20, 2009.

 

Previous closed out trades not listed here may be seen in the March, February and January weekly newsletters. See past issues at http://www.princetonresearch.com/market-strategies-newsletter/

                                                                                              

Remember, these trades are based on your participation in the

TEXT MESSAGE TRADE ALERTS SERVICE TO RECEIVE ALL UPDATES.

TEXT the word UPDATES to 69302 To Get In Now

 

 

                                This Weeks’ Economic Numbers and Media Data

 

Monday Investors will assess international political and economic events.  
Tuesday 09:00 hrs Case-Shiller 20-city Index Feb ( -3.4% vs -3.8% )10:00 hrs Consumer Confidence Apr ( 69.5 vs 70.2 )

10:00 hrs New Home Sales Mar ( 320K vs 313K )

10:00 hrs FHFA Housing Price Index Feb ( NA vs 0.0% )

Wednesday 07:00 hrs MBA Mortgage Index 04/21 ( NA vs 6.9% )
08:30 hrs Durable Orders Mar ( -1.9% vs 2.4% )
08:30 hrs Durable Goods -ex Transportation Mar ( 0.5% vs 1.8% )
10:30 hrs Crude Inventories 04/21 (NA vs 3.856M )
12:30 hrs FOMC Rate Decision Apr  ( 0.25% vs 0.25% )
Thursday 08:30 hrs Initial Claims 04/21 ( 373K vs 386K )
08:30 hrs Continuing Claims 04/14 ( 3300K vs 3297K )
10:00 hrs Existing Home Sales Mar ( 4.62M vs 4.59M )
10:00 hrs Pending Home Sales Mar ( 0.5% vs -0.5% )
 Friday 08:30 hrs GDP-Adv. Q1 ( 2.6% vs 3.0% )
08:30 hrs Chain Deflator-Adv.  Q1 (  2.2% vs 0.9% )
08:30 hrs Employment Cost Index Q1  (  0.5% vs 0.4% )
09:55 hrs Michigan Sentiment – Final Apr ( 75.7 vs 75.7 )

 

Economic Data

 

Commodities fell for the fifth consecutive week. The CRB index fell another 0.5% for a cumulative decline of 5%. Most economic reports were dismal last week: Industrial Production was flat, but 0.2% below the consensus; Housing Starts plummeted to 654K vs 700K expected and New Unemployment Claims were up again to 386K vs 375K consensus and 380K last week which was also revised higher to 388K. It all points to a sluggish economic recovery. Leading Economic Indicators bested the consensus by 0.1% at + 0.3%. Retail Sales were up 0.8%, the best positive economic report last week as credit card usage continues buoyant.

 

Fundamentals (previous letters may be seen at www.princetonresearch.com)

 

Strong earnings were an offset to weak economic numbers. Microsoft ( MSFT: $ 32.42 ) gained 5.2% on the week on good numbers, but with Apple having double the market cap, it was not enough to keep Nasdaq from a declining week, off 0.36%. The Dow was best up 1.40%, followed by the Russell, up 0.97%, Transportation gained a  modest 0.72% and the S&P up 0.60%. Apple ( AAPL: $ 572.98 ) fell 5.3%.

 

The glamour stocks were raided and muted what might have been a bull week led by a sliding dollar which fell 0.92%. In addition to the Apple, smaller cap stocks like Panera Bread ( PNRA: $ 150.27 ) lost 7.4; Chipotle Mexican Grill ( CMG: $ 419.26 ) fell 4.8% and Priceline ( PCLN  $ 710.17 ) -3.4%.

 

Nine of the ten Dow Industrial Groups were higher led by Health Care, up 2.15% and Utilities plus 2.04%. Telecommunications rose 1.32% and Basic Materials 1.26%. Industrials gained 1.21%. Technology, of course,  led by Apple plummeted 1.75%.

 

Volatility continued to decline despite the rotten Apple, off 2.11 to 17.44 minus 10.79%. It is hard to get a bear market going with volatility declining.

 

 

Technical Information

 

      Support Levels:   S&P 500           1361; 1346                  Resistance S&P 500   1383; 1399

                                        DOW            12,890; 12,740            Resistance DOW         13,100; 13,340

                                        QQQ             6509; 6430                  Resistance QQQ         6659; 6755                     

                                       Nasdaq          2972; 2937                  Resistance Nasdaq      3045; 3092                                        

 

CYCLES

 

 

 

 

Was April 2 the top for the first half of 2012? Maybe, maybe not. Unlike market bottoms that are more often than not events, market tops tend to be a process. At bottoms, consensus can be quickly reached about valuations and sentiment whereas at tops there is more mud in the water and debate. Having already issued our official Seasonal MACD Sell signal on April 3, and with markets lower today than they were on the day of our Sell Signal, our analysis remains the same and our posture remains defensive for the next several months.

This does not mean that we expect the markets to go in a straight line down. If fact, we would not be surprised to see the markets rally back near their recent highs, but seasonality, fundamentals, the technical picture, and economic data suggest that there is not that much additional upside opportunity in the short-term. The Fed and most other central banks are currently taking a “wait-and-see” approach. Additional central bank liquidity may come, but not anytime soon. Corporate earnings have been mostly mundane. There have been upside surprises, but estimates were quite low in the first place. Then there are the housing and labor markets. It is becoming increasingly clear that warm winter weather was responsible for their improvements as recent data has weakened. Slowing Chinese growth, Europe’s ongoing debt woes, and the nuclear ambitions of Iran and North Korea are certainly not going to send markets to new recovery highs anytime soon either.

Taking all of this into consideration, we are comfortable taking a defensive posture for the “Worst Six Months”, May through October. And although we are on defense, this does not mean we anticipate a significant bear market to develop. The robust start of election-year 2012, combined with bullish election year forces are likely to produce solid full-year gains, but the path to full-year gains is likely to be rough going for a while.

 

 

 

                    Rule 17B requires disclosure of payment for investor relations*

 

Princeton Research has received about $ 2,500 per month from Lucas ( LEI ) marked with an asterisk.    Princeton has been paid for investor relations in the past and has negotiated a contract to be paid 100,000 restricted shares from Leo Motors. In addition Princeton has bought shares. Princeton is paid by Baron Energy ( BROE ) to do investor relations in the amount of 300,000 shares. Princeton has also bought separate shares about 327,600 and owns the shares for its own account. Cross Border paid us 25,000 restricted shares several months ago. We do not currently represent Cross Border. Princeton has 2,225,000 shares of AIVN.

 

Pursuant to the provisions of Rule 206 (4) of the Investment Advisers Act of 1940, readers should recognize that not all recommendations made in the future will be profitable or will equal the performance of any recommendations referred to in this Email issue. Princeton may buy or sell shares in companies it represents at any time.

 

CONTACT

 

Please Direct All Inquiries To:

 

Mike King

Princeton Research

3887 Pacific Street, Las Vegas, Nevada 89121

 

Phone: (702) 650-3000

Fax: (702) 697-8944

mike@princetonresearch.com

Visit: www.princetonresearch.com

 

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